Guides For The Watch Industry

16 CFR Part 245 · Guides · in the Code of Federal Regulations 1969-1995 (26 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1995 CFR · Earliest edition: 1969 CFR

Text (1995 edition, OCR)

Federal Trade Commission

$243.13 Deception as to origin.

(a) Industry members should not
make any direct or indirect representa-
tion which is false or likely to mislead
prospective purchasers concerning the
origin of either domestic or foreign in-
dustry products, or any substantial
parts thereof.

(b) Industry members should clearly
and conspicuously disclose that indus-
try products, or any substantial parts
thereof, were produced or manufac-
tured in an identified foreign country
when the failure to make such disclo-
sure has the capacity and tendency or
effect of deceiving prospective pur-
chasers. Such disclosures should be in
the form of a legible mark, stamp or
label on the product, and any samples
thereof, and should be of such size, con-
spicuousness and permanency as to re-
main noticeable and legible upon cas-
ual inspection until consumer pur-
chase. (Guide 13]

$248.14 Other in this Title 16 ap-
plicable to this industry.

The Commission has adopted Guides
Against Deceptive Pricing, Part 233,
Guides Against Deceptive Advertising
of Guarantees, Part 239, and Guides
Against Bait Advertising, Part 238, all
of which have general application and
furnish additional guidance for mem-
bers of the Decorative Wall Paneling
Industry. Members of this industry
should comply with those parts.

PART 244~—~(RESERVED)

PART 245—GUIDES FOR THE
WATCH INDUSTRY

Sec,

245.1 Definitions.

245.2 Misrepresentation in general.

245.3 Misrepresentation of metallic com-
position of watchcases and certain watch
bands.

245.4 Misrepresentation as to durability or
suitability.

245.5 Misrepresentation of protective fea-
tures.

245.6 Deception as to jewels.

245.7 Misrepresentation of accessories.

245.8 Deceptive selling of used, rebuilt, or
secondhand products.

245.9 Deceptive imitation, obliteration, or
concealment of trade names, trademarks,
and marks.

53

§ 245.1

245.10 Disclosure of foreign origin of watch
movements, movement parts, and related
parts.

245.11 Deceptive pricing.

245.12 Commercial bribery.

245.138 Coercing purchase of one product asa
prerequisite to the purchase of other
products.

245.14 Misrepresentation of the character
and size of business, extent of testing,
etc.

245.15 Guarantees, warranties, etc.

245.16 Use of the word ‘‘free’’.

APPENDIX TO PART 245

AUTHORITY: Secs. 5, 6, 38 Stat. 719, as
amended, 721; 15 U.S.C. 45, 46.

SOURCE: 33 FR 10332, July 19, 1968, unless
otherwise noted.

$245.1 Definitions.

For the purpose of this part the fol-
lowing definitions shall apply:

(a) The term watch means a time-
piece or time-keeping device for meas-
uring or indicating time which is de-
signed to be worn on or about the per-
son.

(b) The term watchcase or case means
any metal case, covering, or housing of
any quality or description for a watch
as defined above and shall include the
back, center, lugs, bezel, pendant,
crown, bow, cap, and other parts there-
of, including a watch band which has
been permanently affixed thereto; and
unless otherwise stated, either term as
used in this part applies to the case
whether marketed separately or to-
gether with the movement or works.

(c) The term accessories means prod-
ucts, other than watch bands, which
are affixed to and sold in combination
with watchcases or watches, such as,
for example, bracelets, pins, pendants,
brooches, or ornaments. (NOTE: Metal-
lic watch bands of the detachable type
are subject to the provisions of the
Trade Practice Rules for the Metallic
Watch Band Industry, promulgated
June 30, 1962, and amended June 16,
1964.)

(d) The term mark means any letter,
figure, numeral, symbol, sign, word, or
term, or any combination thereof,
which has been stamped, embossed, in-
scribed, or otherwise placed, on any in-
dustry product for the purpose of dis-
closing its metallic composition or any
other material information.


§ 245.2

(e) The term plate or plated means
that a sheet or shell of metal has been
applied by soldering, brazing, welding,
or other mechanical means to the
outer surfaces of foundation metal
stock.

(f) The term electroplate or electro-
plated means that a coating of metal
has been applied by the electrolytic
method to the outer surfaces of founda-
tion metal stock.

(g) The term industry product means a
watch, watchcase, accessory or a part
thereof.

(h) The term industry member means a
person, firm, corporation, or organiza-
tion engaged in the importation, manu-
facture, sale, or distribution of any in-
dustry product. (Guide 1)

§245.2 Misrepresentation in general.

Industry members should not use, or
cause or promote the use of any pro-
motional materials, advertising, labels,
tags, marks, insignia, brand or trade
names, depictions or packaging which
bear, contain, or constitute representa-
tions which have the capacity and
tendency or effect of misleading or de-
ceiving purchasers or prospective pur-
chasers:

(a) With respect to the grade, qual-
ity, estimated Hfe, appearance, sub-
stance, size, construction, novelty,
composition, accuracy, dependability,
imperviousness, repairability, conform-
ance to standards, or methods of manu-
facture, of industry products; or

(b) With respect to the country of or-
igin of industry products or parts
thereof; or

(c) In any other material respect.
(Guide 2) :

§245.3 Misrepresentation of metallic
composition of watchcases and cer-
tain watch bands.

Industry members should not di-
rectly or indirectly, in advertising,
marking, labeling, in a brand or trade
name, or otherwise, misrepresent the
metallic composition of a watchcase.
With respect to cases having an ex-
posed surface or surfaces which are, or
have the appearance of being, metal,
the metallic composition of the cases
should be clearly and conspicuously
disclosed in accordance with the meth-
ods and terminology set forth below:

16 CFR Ch. | (1-1-95 Edition)

(a) Exclusions. In determining the me-
tallic composition of watchcases, parts
which are necessarily required to be of
steel or some other base metal may be
excluded, namely, the springs, hinge
pins for jointed cases, spring pins for
straps or bands, separate inside move-
ment holding rings, and crown cores.

(b) Gold. Watchcases which are not
composed entirely of fine (24 karat)!
gold should not be marked with the un-
qualified word ‘“‘gold” or an abbrevia-
tion thereof.

(c) Gold alloy. Watchcases composed
entirely of an alloy of gold of not less
than 10 karat fineness! should be
marked as “gold” or by an abbrevia-
tion thereof, and such word or abbre-
viation should be immediately pre-
ceded with a correct designation of the
karat fineness! of the alloy, for exam-
ple, ‘10 Karat Gold,’ ‘14 Kt Gold,” ‘10
Kt.”

(d) Gold filled. Watchcases which have
been plated by mechanical means with
gold, or with an alloy of gold of not
less than 10 karat fineness,1 and the
plating is of a thickness throughout of
not less than three one-thousandths? of
an inch after completion of all finish-
ing operations, should be marked
“Gold Filled’, or by an abbreviation
thereof, and such term or abbreviation
should be immediately preceded by a
correct designation of the karat
fineness! of the gold alloy of which the
plating is composed, as, for example,
“12 Karat Gold Filled’, ‘12 K.G.F.”

(e) Rolled gold plate. Watchcases
which have been plated by mechanical
means with gold, or with an alloy of
gold of not less than 10 karat fineness, !
and the plating is of a thickness
throughout of not less than one and
one-half one thousandths? of an inch
upon completion of all finishing oper-
ations, should be marked “‘gold plate’’
or “rolled gold plate’’ or by an abbre-
viation thereof and such term or abbre-
viation should be immediately pre-
ceded by a correct designation of the
karat fineness! of the gold alloy of
which the plating is composed, as, for

18ubject to the tolerances applicable

thereto under the National Stamping Act (15
U.8.C., section 294, et seq.).

1See footnote on previous page.

28ubject to permissible tolerances set
forth in paragraph 1 of the appendix.


Federal Trade Commission

example, “10 Karat Gold Plate,” ‘10
Karat Rolied Gold Plate,” ‘10
K.R.G.P.””

(f) Gold electroplate. (1) Watchcases
which have been electroplated with
gold or with an alloy of gold of not less
than 10 karat fineness, to a thickness
throughout of not less than three-
fourths one thousandths? of an inch
upon completion of all finishing oper-
ations and which can successfully with-
stand the tests set forth in paragraph 2
of the appendix, should be marked
“gold electroplate’’ or “gold electro-
plated’? and such term may be imme-
diately preceded by a correct designa-
tion of the karat fineness! of the gold
alloy of which such coating is com-
’ posed, e.g., ‘16 Karat Gold Electro-
plate.’’ If the thickness of such gold
electroplate is one and one-half one
thousandths? of an inch or greater, it
may be described as ‘‘Heavy Gold Elec-
troplate,’’ and such term may be imme-
diately preceded by a correct designa-
tion of the karat fineness! of the gold
alloy of which such plating is com-
posed. Gold electroplated products
which satisfy the provisions in this
paragraph may also be marked with an
accurate disclosure of the actual thick-
ness of the eléctroplate, e.g., ‘‘Y4000”’
gold electroplate.”

(2) Watches which have cases marked
“gold electroplate’’ or “gold electro-
plated” in conformity with this section
should, when sold to the ultimate
consumer within the 18-month period
immediately following the operative
date of this section, be accompanied by
an appropriate statement explaining
the meaning of the marking and pro-
viding sufficient information to enable
the consumer to make an informed
judgment regarding the quality of the
coating. The statement should not pur-
port to compare the merits of electro-
plated coatings with the merits of
coatings applied by other processes.
The statement should be made on any
point of sale materia] describing or re-
ferring to the watch and on a label or
tag firmly affixed to the watch.

(g) Silver. Watchcases which are com-
posed entirely of pure silver or of an
alloy of silver of not less than nine-
hundred twenty-five one thousandths
fineness! should be marked as “‘silver,”
“sterling” or “sterling silver” or by an

161-051 O—95——3

§ 245.3

abbreviation thereof. Cases which are
composed entirely of a silver alloy of
at least nine-hundred one thousandths
fineness! should be marked ‘“‘coin sil-
ver.”

(h) Silver plate. Watchcases which
have been plated or electroplated with
silver, should be marked as “silver
plate” or “silver plated’’, if after the
completion of all finishing operations,
such plating is of sufficient thickness
to withstand normal use and last
throughout the estimated life of the
watch.

(i) Other precious metals. Watchcases
which are composed in whole or in part
of a precious metal other than gold or
silver, or of an alloy of such a metal, or
which have been plated or electro-
plated with such a metal or alloy
thereof, should be marked so as to dis-
close the kind of precious metal or
alloy so used and the manner of its use.

(j) Base metals. Watchcases or parts
thereof which do not meet the mini-
mum requirements set forth in para-
graphs (b) through (i) of this section
should be marked as “Base Metal’’ or
so as to identify clearly the kind or
kinds of metal of which they are com-
posed, e.g., ‘“‘Aluminum,” ‘Stainless
Steel,” ‘‘Chromium Plated Steel,’ and
under these circumstances the mark
should not contain the names of or ab-
breviations for any precious metal.

(k) Combination of metals. Watchcases
which are composed of parts having dif-
ferent metallic compositions, should be
marked in the manner prescribed in
paragraphs (b) through (j) of this sec-
tion with an accompanying expla-
nation of the part or parts to which
such markings or descriptions apply,
e.g., “Base Metal Back,” ‘14 K Gold
Filled Bezel.”

(1) Substantiality. A watchcase should
not be composed of metals or alloys, or
have coatings of either base metal or
precious metals, which are not of suffi-
cient thickness and substantiality as
to render lasting and effective service,
with due regard to the estimated life of
the watch of which it is a part, unless
the fact that such case will not render
such service is clearly and conspicu-
ously disclosed on a tag, label, or in
other printed material which accom-
panies the watch when it is sold to the
ultimate consumer.


§ 245.4

(m) Placement of markings and abbdre-
viations. All markings on watchcases as
provided in this part should be of a per-
manent type and made on the exterior,
exposed surface of the back, and be so
placed and of such a size that they will
be readily apparent to purchasers of
the product. Provided that markings,
respecting the metallic composition of
watch bands which are part of the
cases, may be placed on the bands or on
the cases. All markings should be stat-
ed in the English language and printed
in letters or figures of the same size
and conspicuousness as that used for
words or abbreviations descriptive of
any precious metal content, i.e.,
“gold,” “silver,” or ‘‘karat’?. When
using abbreviations in markings as
provided by this section, ‘“‘G’? may be
used for the word “Gold,” ‘‘K’’ or “Kt”
for the word ‘‘Karat,’’ and ‘“Chr’’ for
the word “Chromium’’. In addition
“G.F.’? may be used for ‘‘Gold Filled,”
and “R.G.P.” for ‘““Rolled Gold Plate.”
The terms ‘‘electroplate”’ and ‘‘electro-
plated’’ should not be abbreviated. The
word ‘‘filled’? and the word “plate”
should not be abbreviated in marks
containing the word ‘‘gold’’ unless the
word ‘‘gold’’ is abbreviated by use of
the letter ‘‘G’’.

(n) Misuse of terms. The words “‘gold,’’
“Karat,” “silver,’’ “sterling,’’ ‘‘coin,”’
or any abbreviation thereof either
alone or in conjunction with other
words such as “‘solid,”’ “plate,” “plat-
ed,”’ ‘‘filled,’’ ‘‘electroplate,’’ or ‘“‘elec-
troplated’’ or any abbreviation thereof
should not be used as a marking or as
descriptive of a watchcase or part
thereof in labeling, advertising, trade
names or otherwise in a manner incon-
sistent with the provisions of this sec-
tion. .

(0) Disclosures in advertising. All dis-
closures which are placed on industry
products in conformity with this sec-
tion should also appear in all advertis-
ing or other promotional material per-
taining to such products, irrespective
of the media used, whenever state-
ments, representations, or depictions
are made or appear therein, which in
the absence of such disclosures serve to
create a false impression that the prod-
ucts or parts thereof, are of a certain
metallic composition. The disclosure
so made should be of such conspicuous-

56

16 CFR Ch. I (1-1-95 Edition)

ness and clarity as to be noted by pur-
chasers and prospective purchasers cas-
ually reading, or listening to, such ad-
vertising, and the words and terms
therein which are descriptive of metal-
lic composition should not be used ex-
cept as provided in this section. (Guide
3)

$245.4 Misrepresentation as to dura-
bility or suitability.

Industry members should not mis-
represent directly or indirectly, in ad-
vertising, labeling, marking, brand or
trade name, depictions, or otherwise
the characteristics of a product or the
ability of a product to resist or with-
stand damage from stated causes, or of
its suitability for particular uses. Ilus-
tratively, industry members should
not, under this section: Falsely des-
ignate or describe a watch as a chro-
nometer or use such terms as “skin
divers,” ‘“‘navigators,”’ or “railroad” as
descriptive of industry products which
do not possess the characteristics, e.g.,
ruggedness, accuracy, dependability, or
other features, required of watches
used by persons engaged in those ac-
tivities. [Guide 4]

§245.5 Misrepresentation of protective
features.

(a) Industry members should not mis-
represent directly or indirectly, in ad-
vertising, other promotional material,
labeling, brand or trade name, or
marking, or otherwise, the ability of a
product to withstand or resist damage
or other harmful effects from stated
causes. Ilustratively, under this sec-
tion a product should not be described
or designated as “shockproof,’”’ ‘““water-
proof,’’ ‘‘nonmagnetic,”’ or ‘‘all proof,”
even if such term or terms are qualified
by words or phrases, e.g., ‘“waterproof
when case, crown, and crystal are in-
tact.”’ In addition a product should not
be described or designated as ‘‘shock
resistant,”’ ““water resistant,”’ or ‘“‘anti-
magnetic’’ unless it conforms to the
applicable provisions set forth below:

(1) Shock resistant. A product may be
properly described or designated as
“shock resistant’? or ‘“‘shock absorb-
ing” if it possesses a level of resistance
to damage from shock sufficient to in-
sure that it will successfully withstand


Federal Trade Commission

the test described in paragraph 3 of the
appendix to this part.

(2) Water resistant. An industry prod-
uct may be properly described or des-
ignated as ‘‘water resistant’ if it is
sufficiently impervious to water or
moisture so as to insure that at the
time of its sale to the ultimate
consumer it will successfully withstand
the test described in paragraph 4 of the
appendix to this part.

(3) Antimagnetic. A product may prop-
erly be described or designated as
“antimagnetic”’ if it is so designed and
constructed as to provide a substantial
degree of protection against mag-
netism, and the product will success-
fully withstand the test described in
paragraph 5 of the appendix to this
part.

(b) Whenever a product described or
designated as ‘‘shock resistant,”
“water resistant,’ or ‘“‘antimagnetic”’
in conformity with this section is sold
to the ultimate consumer, the designa-
tion should be accompanied by an ap-
propriate statement explaining the
meaning of the term and the care and
maintenance ordinarily required to
preserve the described qualities. The
statement should be made on any point
of sale material describing or referring
to the watch having the designation in
question and on a label or tag firmly
affixed to the watch bearing the des-
ignation. [Guide 5]

§245.6 Deception as to jewels.

Industry members should not mis-
represent directly or indirectly, in ad-
vertising, labeling, marking, brand or
trade name, or otherwise, the number
of jewels contained in a watch, or that
a watch is ‘jeweled’ or that a watch
contains a jeweled movement. Dlustra-
tively, industry members should not:

(a) Represent or describe a watch as
“jeweled”? or as containing a jeweled
movement unless the watch movement
contains at least seven jewels each of
which serves the purpose of protecting
against wear from friction by providing
a mechanical contact with a moving
part at a point of wear;

(b) Refer to the number of jewels con-
tained in a watch unless each and
every one of these jewels serves the
purpose of protecting against wear
from friction by providing a mechani-

57

§ 245.9

cal contact with a moving part at a
point of wear. [Guide 6]

§245.7 Misrepresentation of
sories.

Industry members should not mis-
represent directly or indirectly, in ad-
vertising, labeling, marking, brand or
trade name, or otherwise, the composi-
tion, quality, or any other material
fact respecting accessories. Dlustra-
tively, industry members should not,
under this section: use terms, represen-
tations of metallic composition, words
or names associated with precious,
semiprecious, synthetic, and imitation
stones, and quality marks in a manner
inconsistent with the provisions of the
Commission’s Trade Practice Rules for
the Jewelry Industry, promulgated
June 28, 1957, and amended November
17, 1959. (Gaide 7]

§245.8 Deceptive selling of used, re-
built, or secondhand products.

An industry product which in whole
or in part is used, secondhand, rebuilt,
repaired, refinished, or which contains
parts that are used, secondhand, re-
built, repaired or refinished, should not
be sold, offered for sale or distributed
unless the fact that such product or
parts are not new, or are used, second-
hand, rebuilt, or repaired, or refin-
ished, is fully and nondeceptively dis-
closed in all advertising of the product,
on the product itself or on a label firm-
ly affixed thereto, and on the imme-
diate container in which the product is
sold to the ultimate consumer. (Guide
8)

§245.9 Deceptive imitation, oblitera-
tion, or concealment of trade
names, trade-marks, and marks.

Industry members should not imitate
or simulate the trade names or trade-
marks of competitors, or obliterate,
conceal, or remove tags, labels, marks,
or other disclosures placed on an indus-
try product or on the package in which
it is sold to the ultimate consumer
under circumstances having the capac-
ity and tendency of deceiving the ulti-
mate consumer as to the identity of
the manufacturer, origin of the prod-
uct, or in any other material respect.
(Guide 9)

acces-


§ 245.10

$245.10 Disclosure of foreign origin of
watch movements, movement parts,
and related matters.

(a) Watches having movements of
foreign origin or movements which
contain parts of foreign origin should
not be offered for sale or sold unless
they are accompanied by a clear and
conspicuous disclosure of the country
or countries of origin of the movement.

(b) The countries of origin of a watch
movement are the country in which
the movement has been assembled and
the country in which its substantial
and significant parts have been manu-
factured. For purposes of this section,
if parts constituting 50 percent or more
of the cost to the assembler of all the
parts of the movement are manufac-
tured in a single country, those parts
shall be presumed to be the substantial
and significant parts of the movement.

(1) If the movement has been assem-
bled in the same foreign country in
which parts constituting 50 percent or
more of the cost to the assembler of all
the parts of the movement have been
manufactured, the name of that coun-
try alone should be used to designate
the origin of the movement. Appro-
priate forms of disclosure would in-
clude ‘Swiss Made’’, or ‘‘Japan’”’.

(2) If the watch movement has been
assembled in one country and parts
constituting 50 percent or more of the
cost to the assembler of all the parts of
the movement have been manufactured
in a single other country, the names of
both such countries, and no other,
should be used to designate the origin
of the movement. Appropriate forms of
disclosure would include ‘‘Assembled in
France from Swiss parts’’, or ‘‘Japa-
nese parts, assembled in the United
States’.

(3) If the watch movement has been
assembled in one country but parts
constituting 50 percent or more of the
cost to the assembler of all the parts of
the movement have not been manufac-
tured in a single other country, only
the name of the country of assembly
should be used, accompanied by a dis-
closure that the parts are partially for-
eign, imported or domestic, as the case
may be. Appropriate forms of disclo-
sure would include ‘‘Movement assem-
bled in the United States from domes-
tic and imported parts’’ or ‘‘Move-

58

16 CFR Ch. | (1-1-95 Edition)

ments assembled in France from for-
eign parts” or ‘‘Assembled in Germany
with parts from foreign countries’’.

(4) For purposes of this section, the
United States includes only the States,
the District of Columbia, Puerto Rico,
the American Virgin Islands, Guam
and American Samoa.

(c) In making the disclosures under
the circumstances set forth in para-
graphs (b) (2) and (3) of this section,
care should be exercised to insure that
the form selected does not imply di-
rectly or indirectly that the movement
is solely a product of the country from
which its substantial and significant
parts were obtained, or that it is solely
a product of the country in which the
movement was assembled.

(d) The disclosures provided for in
this section should be permanently
marked on an exposed surface of the
watch or on a label or tag affixed
thereto which has such a degree of per-
manency as to remain thereon until
consummation of the consumer sale of
the watch and be of such size and con-
spicuousness that they will be readily
apparent to purchasers or prospective
purchasers making a casual inspection
of the watch. [Guide 10]

(35 FR 13122, Aug. 18, 1970]

§245.11 Deceptive pricing.

Members of the industry should not
represent directly or indirectly in ad-
vertising or otherwise that an industry
product may be purchased for a speci-
fied price, or at a saving, or at a re-
duced price, when such is not the fact;
or otherwise deceive purchasers or pro-
spective purchasers with respect to the
price of any product offered for sale; or
furnish any means or instrumentality
by which others engaged in the sale of
industry products may make any such
representation.

NOTE: The Commission’s January 8, 1964,
Guides Against Deceptive Pricing furnish ad-
ditional guidance respecting price savings
representations and are to be considered ‘as
supplementing this section. Copies are avail-
able upon request.

[Guide 11]

§ 245.12 Commercial bribery.

Members of the industry should not
give, offer to give, or permit or cause


Federal Trade Commission

to be given, directly or indirectly,
money or anything of value to employ-
ees or agents of customers or prospec-
tive customers, without the knowledge
of their employers or principals, as an
inducement to influence or cause their
employers or principals to purchase or
contract to purchase the products of
such industry members, or to refrain
from purchasing products from com-
petitors of such members. [Guide 12]

$245.13 Coercing purchase of one
product as a prerequisite to the
purchase of other products.

Members of the industry should not
coerce a customer or prospective cus-
tomer to purchase one or more prod-
ucts as a prerequisite to the purchase
of one or more other products, where
the effect may be substantially to less-
en competition, or tend to create a mo-
nopoly or to unreasonably restrain
trade. [Guide 13]

$245.14 Misrepresentation of the char-
acter and ze of business, extent of
testing, etc.

Industry members should not falsely
represent, directly or indirectly, in
company, brand, or trade name, or in
advertising, labeling or otherwise:

(a) The length of time they have been
in business;

(b) The extent of their sales;

(c) Their rank in the industry as pro-
ducers or distributors of a product or
type of product;

(d) That they are manufacturers of
industry products or own or control a
factory engaged in the manufacture of
such products;

(e) That they own or operate a lab-
oratory, or that their products have
been tested in any particular manner
or for any period of time, or with any
particular results;

( That a product or manufacturing
process is new or exclusive; or

(g) Any other material aspect of their
business or products. [Guide 14]

§245.15 Guarantees, warranties, etc.

(a) Industry members should not rep-
resent in advertising or otherwise that
@ product is ‘“‘guaranteed’” without
clear and conspicuous disclosure in
close conjunction with such represen-
tation of:

59

§ 245.16

(1) The nature and extent of the guar-
antee, and

(2) Any material conditions or limi-
tations in the guarantee which are im-
posed by the guarantor, and

(3) The manner in which the guaran-
tor will perform thereunder, and

(4) The identity of the guarantor.

(b) A seller or manufacturer should
not advertise or represent that a prod-
uct is guaranteed when he cannot or
does not promptly and scrupulously
fulfill! his obligations under the guaran-
tee.

(c) A specizic example of nonperform-
ance of an obligation under the guaran-
tee would arise in connection with the
use of the phrase, ‘“‘Satisfaction or your
money back”’ if the guarantor does not
promptly make a full refund of the pur-
chase price upon request, irrespective
of the reason for such request.

(d) Guarantees should not be used
which under normal conditions are im-
practical of fulfillment or which are for
such a period of time or are otherwise
of such nature as to have the capacity
and tendency of misleading purchasers
or prospective purchasers into the be-
lief that the product so guaranteed has
a greater degree of serviceability, dura-
bility or performance capability in ac-
tual use than is true in fact.

(e) This section has application not
only to ‘‘guarantees’’ but also to ‘‘war-
ranties’’, to purported ‘‘guarantees’’
and ‘warranties’, and to any promise
or representation in the nature of a
“guarantee” or ‘“‘warranty.”

Nore: The Commission’s April 26, 1960,
Guides Against Deceptive Advertising of
Guarantees furnish additional guidance re-
specting guarantee representations and are
to be considered as supplementing this sec-
tion. Copies are available upon request.

(Guide 15]

§245.16 Use of the word “free”.

In connection with the sale, offering
for sale, or distribution of industry
products, industry members should not
use the word ‘‘free’’ or any other word
or words of similar import, in adver-
tisements or in other offers to the pub-
lic, as descriptive of an article of mer-
chandise, or service, which is not an
unconditional gift, under the following
circumstances:


Pt. 245, App.

(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the ‘‘free’’ arti-
cle of merchandise or service offered
are not clearly and conspicuously set
forth at the outset so as to leave no
reasonable probability that the terms
of the offer will be misunderstood; and
regardless of such disclosure:

(b) When, with respect to any article
of merchandise required to be pur-
chased in order to obtain the ‘‘free”’ ar-
ticle or service, the offerer (1) increases
the ordinary and usual price of such ar-
ticle of merchandise, or (2) reduces its
quantity, or (3) reduces the quantity or
size thereof.

Nore 1: The disclosure provided by para-
graph (a) of this section should appear in
close conjunction with the word ‘‘free’’ (or
other word or words of similar import) wher-
ever such word first appears in each adver-
tisement or offer. A disclosure in the form of
a footnote, to which reference is made by use
of an asterisk or other symbol placed next to
the word ‘‘free’’, will not be regarded as com-
pliance. (Guide 16]

Notre 2: Provisions of outstanding Cease
and Desist Orders pertaining to subject mat-
ter covered by this part will not be construed
by the Commission as prohibiting or requir-
ing more than the relevant provisions of this
part.

(33 FR, 10332, July 19, 1968, as amended at 33
FR 15021, Oct. 8, 1968]

APPENDIX TO PART 245

Set forth in this appendix are the thick-
ness tolerances, and tests referred to in the
foregoing Guides in this part.

1. Thickness tolerances: plated and electro-
plated cases. The minimum thicknesses speci-
fied in paragraphs (d), (e), and (f) of § 245.3 for
the coatings of gold or gold alloy on
watchcases shall mean that the coating of

precious metal affixed to the surface of the -

metal stock shall be throughout the surface
and at the thinnest point not less than the
thickness specified after the completion of
all finishing operations, including polishing,
except, however, for such deviations there-
from, not exceeding 20 percent (minus) of the
stated thickness, as may be proved by the
manufacturer to have resulted from unavoid-
able variations in manufacturing processes
and despite the exercise of due care, which
deviation so proved shall be allowed if and
when the quantity of precious metal remain-
ing plated on the outside of the case ifs suffi-
cient to equal the quantity necessary to pro-
vide the specified minimum thickness at all
points on such watchcase including the thin-
nest point.

60

16 CFR Ch. | (1-1-95 Edition)

2. Gold electroplate: standards and tests. The
gold electroplated surface coating of a
watchcase should be free of cracks, blisters,
pits or other flaws, and capable of success-
fully undergoing the following tests:

a. Adhesion. The watchcase should be heat-
ed to a temperature of not less than 360° nor
more than 400° C. and maintained at that
temperature for not less than 5 minutes. At
the end of that time such surface coating
should show no signs of blistering, flaking,
peeling, or similar defects.

b. Hardness. Such surface coating should
undergo a Knoop hardness test with a 25
gram load and achieve a rating of not less
than 130.

c. Porosity. After such surface coating has
been thoroughly cleaned and freed of any for-
eign material, the case should be:

(1) Immersed in a solution of one part con-
centrated nitric acid (sp.gr. 1.42) and one
part water at room temperature for 5 min-
utes; and

(2) Exposed to fumes of concentrated nitric
acid (sp.er. 1.42) in a closed vessel for 3 hours
at room temperature. .

At the conclusion of each of the foregoing
porosity tests, the surface coating should
show no signs of having been attacked. Any
discoloration or pitting should be considered
as signs of an attack. The nitric acid solu-
tion in which the watchcase was immersed
should be tested for the presence of metal by
making it slightly alkaline with ammonium
hydroxide and by adding a solution of ammo-
nium or sodium sulfide. The formation of a
black precipitate indicates that the coating
has been attacked.

8. Test for shock resistance. A watch should
be tested for shock resistance in a room hav-
ing a temperature between 18° and 25° C.
which does not vary by more than 2° during
the test. A wrist watch which does not have
a@ permanently affixed band should be tested
without the band or strap.

The test should be conducted as follows:

a. One hour after the watch has been fully
wound, its daily rate in each of the following
three positions should be determined by ob-
serving it for 2 minutes in each position:

(1) Position HB (horizontal with the dial
facing down); ,

(2) Position VC (vertical with 3 o’clock to
the watch’s left);

(3) Position VB (vertical with 3 o’clock
pointed downwards).

b. Shocks equal to that which the watch
would receive if it were dropped from a
height of 3 feet onto a horizontal hardwood
surface should be applied as follows:

(1) The first shock should be applied to the
middle of the watch at a position directly op-
posite the crown and in a direction which is
parallel to the plane of the watch;

(2) The second shock should be applied to
the crystal, and in a direction which is per-
pendicular to the plane of the watch.


Federal Trade Commission

c. Five minutes after the last shock, the
daily rate of the watch in each of the three
positions described in a. above should be de-
termined by observing it for 2 minutes in
each position. The differences in daily rate
before and after the shock should be deter-
mined for each position. The residual effect
of the shocks will be equal to the greatest of
these differences.

A watch will be considered to have passed
the foregoing test, if after application of the
shocks, it does not stop; the residual effect
does not exceed 60 seconds per day; and an
examination of the watch does not disclose
any physical damage which would affect its
operation or appearance, e.g., hands bent or
out of position, cracked crystal, or auto-
matic or calendar devices inoperable or out
of alignment.

4. Test for water resistance. A watch should
be tested for water resistance by immersing
it completely for at least 5 minutes in water
under atmospheric pressure of 15 pounds per
square inch and for at least another 5 min-
utes in water under an additional pressure of
at least 35 pounds per square inch (total
pressure of 50 pounds per square inch). If the
watch does not admit any water or moisture
it will be considered to have passed the test.

5. Test for antimagnetic qualities. A watch
should be tested for its resistance to mag-
netism by placing it in a demagnetized con-
dition in an electrical field of not less than
60 Gauss for at least 5 seconds in a vertical
position and for at least 5 seconds in a hori-
zontal position. If the daily rate of the watch
has not been changed by more than 15 sec-
onds as a result of the foregoing exposure, it
shall be considered to have passed the test.

PART 247—GUIDES FOR THE LADIES’
HANDBAG INDUSTRY

Sec.

247.0 Definitions.

247.1 Misrepresentation (general).

247.2 Misrepresentation and deception as to
material composition.

247.8 Form of disclosure as to material com-
position.

247.4 Misrepresentation as to aniline finish,
graining, embossing, and processing.

247.5 Misuse of terms such as ‘“Scuffproof,”’
“Scratchproof,’’ “Scuff Resistant,’’ and
“Scratch Resistant.”

247.6 Deceptive pricing.

247.7 Discriminatory prices, rebates,
counts, etc.

247.8 Advertising or promotional allow-
ances, or services or facilities.

247.9 Inducing or receiving illegal discrimi-
nation in price, advertising or pro-
motional allowances, or services or fa-
cilities.

dis-

€1

§ 247.2

AUTHORITY: Secs. 5, 6, 38 Stat. 719, as
amended, 15 U.S.C. 45, 46; 49 Stat. 1526; 15
U.S.C. 13, as amended.

SouRcE: 4 FR 9924, June 27, 1969, unless
otherwise noted.

$247.0 Definitions.

For purposes of this part the follow-
ing definitions apply:

(a) Industry member means any per-
son, firm, corporation, or organization
engaged in the manufacture, sale, or
distribution of any industry products
as defined below.

(bo) Industry product means all kinds
and types of ladies’ handbags, shoulder
bags, purses, pocketbooks, and similar
articles, of any composition.

$247.1 Misrepresentation (general).

No representation should be made in
advertising, labeling, or any other
manner, which is likely to mislead or
deceive any purchaser concerning the
material composition, quality, finish,
durability, price, origin, construction,
ease of cleaning, or any other feature,
of an industry product. (Guide 1)

§247.2 Misrepresentation and decep-
tion as to material composition.

(a) The material composition of an
industry product should not be mis-
represented in any manner. Included
in, but not limited to, representations
which should not be made concerning
material composition are the follow-
ing:

(1) Any representation that an indus-
try product or part thereof is made of
top grain leather, split leather, leather
from the skin or hide of a certain ani-
mal, vinyl, plastic, brass or other
metal, or any other material, when
such is not the fact.

(2) Any representation that an indus-
try product is made wholly or substan-
tially of a particular material when
such is not the fact.

(3) Any trade name, coined name,
trademark or other word, term or rep-
resentation which has the capacity and
tendency to convey the impression
that an industry product is made in
whole or in part from the skin or hide
of an animal, or that material in the
product is leather, split leather, vinyl,
plastic, or other material, when such is
not the fact. Also any stamping, tag,